|$80 mil purchase
Timber industry suffers shutdowns, slowdowns in region
By Tom Kelly
North Louisiana continued to feel the pain of slack demand for wood products, with most mills in the region working short schedules, and some facilities announced for closing. But one mainstay of the agricultural economy got a reprieve with the announcement in late March that the Pilgrim's Pride poultry processing plant in Farmerville has a buyer with plans to keep it running.
Weyerhaeuser Company announced the closure of its plywood veneer mill at Dodson, affecting 183 positions, and at Simsboro, losing 47 positions.
Smurfit-Stone Container Corp. Hodge, Louisiana kraft paper mill resumed operations after a month-long shutdown, with the parent company entering Chapter 11 bankruptcy with new financing.
International Paper Company kraft mill at Bastrop remains closed permanently, and the Morehouse Parish city continues the process of belt tightening to take up the slack in its economy.
The brand-new Jeld-Wen door and window plant two miles south of Dodson sits completed but idle, as the Grants Pass, Oregon-based company elected to delay opening until home construction nationwide recovers from its decline.
Other wood products manufacturers in the region are operating on the edge, taking intermittent downtime which spreads into the wider logging community, as timber demand slackens.
But the most devastating blow, the announced closure of the Pilgrim's Pride poultry processing plant at Farmerville, Union Parish, near the Arkansas border, has had a happier ending--a California-based nationwide meat processing company, Foster Farms, prepared to enter an agreement to buy the plant for a reported $80 million.
Pilgrim's Pride, a publicly traded company based in Pittsburg, Texas, announced in February that it would close plants in Farmerville, Louisiana, El Dorado, Arkansas, and one in Georgia. Layoffs totaling 1,294 employees were to be affected as well as some 300 independent contract growers in the region, a hatchery in Athens, Louisiana, a hatchery and live operations office in Choudrant, Louisiana, and a feed mill at Arcadia, Louisiana.
An economic disaster loomed, not only for the employees of the Farmerville plant, but also the growers who operate the houses in which baby chicks are raised to market size. Many, if not most, are heavily mortgaged, with houses equipped to specifications required by the processors.
The seven-parish region of north and northwest Louisiana served by Pilgrim's Pride facilities produces over 90 percent of the $1.73 billion poultry output in Louisiana, according to figures from the Louisiana AgCenter for the calendar year 2007, latest whole year available.
Because of the economic impact, and number of jobs involved, the Louisiana Economic Development agency, along with the Department of Agriculture and Forestry, stepped into the situation in an effort to keep the Farmerville plant operating.
Pilgrim's Pride operates in 14 states, plus Puerto Rico and Mexico, with a total of 48,000 employees. Facilities includes 32 chicken processing plants in the U.S., and three in Mexico, and 11 prepared food plants, 34 feed mills, and 48 hatcheries, with over 5,000 growers. Gross sales company wide were $8.5 billion.
Besides its Farmerville plant, Pilgrim's also operates a modern processing plant at Natchitoches, which continues running during the Chapter 11 company bankruptcy proceeding.
With an offer of $40 million for purchase of the Farmerville plant by Foster Farms, a family-owned national company based in Livingston, California, Louisiana Economic Development matched with an additional $40 million, which Pilgrim's agreed to accept for the purchase.
Governor Bobby Jindal, and Agriculture and Forestry Commissioner Dr. Mike Strain, along with personnel of Louisiana Economic Development, and LDAF, put the deal together, offering money from the Louisiana Megafund to maintain the plant and related economy in operation.
Dr. Strain told The Piney Woods Journal that there are conditions attached to delivery of the state's money, relating to number of jobs maintained, and others not yet made public during the period of finalizing the purchase. Final approval of the Megafund support depends on approval of the Louisiana Legislature, which meets later this month. Terms of the State grant include repayment if jobs and other conditions are not met, according to Dr. Strain.
The seven parishes of Union, Lincoln, Sabine, Claiborne, Natchitoches, Jackson, and Bienville, produced $818,811,382 in gross farm value from poultry in 2007, which amounted to 92% of the state total of $848.7 million. Poultry in the seven major producing parishes outscored forestry by almost three times over, at $848 million to $274.7 million. (See chart, Page One).
The same seven parishes, also forestry producers, accounted for only 40% of the state's larger forestry farm income of $3.13 billion, which represents over 30 percent of all plant and animal farm value, and over 40 percent of farm value plus value-added by manufacture, statewide.
The new owner at Farmerville, Foster Farms, similarly operates hatcheries, growing houses, feed mills, and other related services. Products include fresh chicken, fresh turkey, and other items, with operations currently in California, Oregon, Washington, Alabama, Colorado, and Arkansas.
Annual Farm Income by Selected
*Latest full calendar year available